The Tech Week that was... July 25~29

Welcome to the latest edition of my weekly newsletter bringing you all the key semiconductor and technology news from around the world in one easy read

?After over 2years of discussing how to fund US based manufacturing, the US government finally moved rapidly this week and both the Senate and the House of Representatives passed the CHIPS and Science Act within 24hours of each other, and now just needs President Biden to sign it into law.?The bill aimed at strengthening US science and innovation includes US$52billion in incentives for companies setting up US based semiconductor manufacturing.?Within the US$52billion funding, US$39 billion is allocated over 5 years to subsidize the domestic chip manufacturing capacities; US$2 billion is provided to focus on legacy chip production to advance economic and national security interests; US$6 billion may be used for the cost of direct loans and loan guarantee.?US$19billion of the act is allocated for 2022.

TSMC confirmed this week that it’s new US Arizona 300mm Fab is on track to begin production in 2024.?The company recently held a “topping out” ceremony for the construction of its Fab.

?Intel Foundry business has signed an strategic partnership with Mediatek to manufacture chips for smart edge devices.?It is believed ?that Intel will manufacture the chips on its 'Intel 16' node, a revamped version of the 22FFL node optimized for low-power devices.?Whilst it is unclear exactly how much will be manufactured by Intel, it is another foot in the door for it’s fledgling foundry business.

This week some major semiconductor companies reported their Q2 revenue.??Here is a round up of some of the key results.?Most companies posting significant year on year growth in revenue but Intel’s revenue continues to slide, though it says it has reached the bottom.

Intel reported Q2 revenue down 22% yoy to US$15.3billion.?Intel CEO blamed “The sudden and rapid decline in economic activity was the largest driver of the shortfall but Q2 also reflected our own execution issues in areas like product design, and the ramp of AXG [Accelerated Computing Systems and Graphics Group] offerings.”?Intel also lowered its full year revenue guidance to a midpoint of US$66.5billion, down 12.5% compared to its previous guidance.

NXP reported Q2 quarterly revenue of US$3.3billion, up 28% yoy. ?NXP CEO said despite “clear macro-economic cross currents, NXP continues to perform well. Customer demand within the Auto and Industrial & IoT end-markets continues to exceed our incrementally improving supply, even as we risk-adjust our long term orders. New design win commitments are remarkably strong across our focus end-markets, which underpins confidence that our investments are well aligned with the long-term market requirements,”?NXP is forecasting Q3 revenue to have a midpoint of US$3.4billion, up 3% quarter on quarter.

STMicroelectronics reported Q2 revenue of US$3.84billion, up 28% yoy.?STM forecasts that Q3 revenue midpoint will be US$4.24billion, up 10.5% sequentially, and the company raised it’s full year forecast to around US$16billion. ?STMicroelectronics expects its factories to run at full steam well into 2023 as the chipmaker's backlog is filled by the car and smartphone industries, prompting it to raise its 2022 outlook and build new production lines.

Qualcomm reported fiscal Q3 revenue of US$10.9billion, up 37% yoy.?For next quarter FQ4, Qualcomm is predicting mid-point revenue of US$11.4billion.?Qualcomm CEO Cristiano Amon said that the company’s results were strong despite being in a “challenging macroeconomic environment.”?Qualcomm CFO Akash Palkhiwala said that the company’s expected fourth-quarter weakness in smartphone chip sales would be in the middle and lower tiers, as opposed to chips for the most expensive phones.

Texas Instruments reported Q2 revenue of US$5.2billion, up 14% yoy with growth across all markets. By segment the company said that the industrial market was up high-single digits, and the automotive market was up more than 20%. We saw weakness throughout the quarter in personal electronics, which grew low-single digits. Communications equipment was up about 25%. and enterprise systems was up mid-teens. For next quarter they are forecasting a midpoint revenue of US$5.1billion.??

Samsung reported record revenue in Q2 of US$59billion, up 21% yoy, as semiconductor sales hit a new high. Samsung said "The memory business’s performance improved both year-on-year and quarter-on-quarter as ASP [average selling prices] stayed at a better-than-expected level thanks to the disciplined sales strategy to meet market demand and the benefits of a strong dollar. "?The company said that server demand remained solid, but demand for consumer products such as mobile weakened due to widening impacts of macro issues

Taiwanese OSAT, ASE reiterated that it still expects to hit its revenue growth target of >20% yoy for 2022, despite some sectors of the market weakening.?Revenue for the ATM group in Q2 was US$3.16billion, up 13% sequentially. ?The worlds #1 OSAT said that whilst some sectors are undergoing an inventory correction, some sectors like data centers, networking, high-performing-computing and automotive devices, are still capacity constrained.?About half of it’s capacity is covered by long term agreements and they don’t see customers trying to re-negotiate these agreements. ?

Whilst Taiwanese foundry UMC reported revenue of US$2.43billion, up 41.5% yoy.?Wafer shipments were up 4.3% from the previous quarter.?Revenue from 22/28nm nodes represented 22% of overall business, an?increase of 29% sequentially driven by additional capacity from Fab 12A P5, that came online in the quarter.?The company expects Q3 to remain firm.?UMC report seeing cooling smartphones, PC and consumer electronics, and the industry is entering a period of inventory correction, but they are working with customers to adjust their product mix.

In market research news…

Global semiconductor revenue is projected to grow 7.4% in 2022, to US$639billion, down from the previous quarter’s forecast of 13.6% growth in 2022.?In 2021 global semiconductor revenue grew 26.3%.?They are forecasting 2023 revenue will decline -2.5% to IS$623billion.

Worldwide silicon wafer area shipments in the second quarter of 2022 rose to a new record high record, edging up 1% sequentially to 3,704 million square inches, according to the latest update by SEMI’s Silicon Manufacturers Group.?

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